Regarding LDO as a bonding token for Node Operators, we get the gut feeling that this is ‘early bagholder rewarding’ tokenomics that doesn’t actually secure the protocol and ‘endogenous collateral’ shouldn’t be the bonding token in any case.
Strongly disagree with this. I think a second layer of LDO/ETH (a combination of those) bonding (which gets slashed locally based on individual NO performance) among NOs is def required as right now NOs have no skin in the game. If they get slashed the Insurance Fund has to cover for their losses at the expense of LDO holders.
Not including any bonding was a great way for Lido to scale quickly but as the stakes get higher we can’t just rely on human layer of coordination among NOs, and the DAO to handle that. The incentives/alignment needs to be more economic on that front.
At 5% take rate the profit margins are huge for NOs and they don’t contribute to the insurance fund at all. If a NO is responsible for managing $100m I believe that they should be able to post atleast 1-2% of that amount as LDO/ETH to show alignment and help cover some part of insurance fund. Otherwise we are left with Insurance fund being solely DAO treasury growing at 5% of staking yield per year.
And If you check the chain most of the NOs (atleast with public addresses) have already sold their LDO. Let’s see if any NOs want to come out and publicly disclose their holdings and talk about their alignment